Steven J. Ross

Steven J. Ross built nothing and invented nothing; what he possessed, in surplus, was a salesman's instinct for the angle no one else had bothered to see. He began with a literal one: the limousines at his father-in-law's Manhattan funeral home, The Riverside, stood unused every night, so the young Ross talked the family into renting them out after dark ^[4][1]. That observation, that idle assets are money lying down, became the engine of a forty-year career that turned a parking-and-funeral business into Warner Communications and finally into Time Warner, for a time the biggest entertainment and media conglomerate in the world ^[1][5].

The corporate vehicle was Kinney, the parking and cleaning company Ross merged his rental operation into and took public in 1962, when its revenues were on the order of $17 million ^[4]. Through the mid-1960s Kinney National Service swallowed businesses with cheerful indiscriminacy, the Ashley-Famous talent agency in 1967, the comics and Mad magazine of National Periodical Publications and the lens-maker Panavision in 1968, and then, in 1969, made the leap that defined him: a roughly $400 million stock bid for the ailing studio Warner Bros.-Seven Arts ^[1][4]. In 1972 Ross shed the parking lots and renamed the whole thing Warner Communications, with the movie studio as its crown jewel ^[1].

Ross ran Warner by a method that was the opposite of the Hollywood mogul's micromanagement. He hired operators he trusted, Ted Ashley, John Calley, and Frank Wells at the studio, handed them "extraordinary autonomy," and bound them to him with salaries that were merely respectable and bonuses that were astonishing, sometimes only loosely tethered to results ^[4][1]. The loyalty this purchased was real and lifelong; so was the indiscipline. The same hands-off largesse that produced A Clockwork Orange, Dirty Harry, and the Cosmos signing of Pelé also produced the catastrophe of Atari, the video-game maker Warner bought for about $28 million in 1976 and which by 1982 threw off half of Warner's roughly $4 billion in revenue, before collapsing in the 1983 industry crash and costing the company close to a billion dollars ^[4][6].

Ross's genius and his vulnerability were the same trait at different magnifications. His openhandedness with executives shaded into a tolerance for the questionable: in the early 1980s he and his deputies were dragged through a federal investigation into the mob-controlled Westchester Premier Theatre, an 800-page private inquiry the Warner board itself commissioned; Ross was never indicted, but two associates were convicted ^[4][2]. The Atari debacle left Warner exposed to Rupert Murdoch, whom Ross fended off in 1983–84 only by selling a large stake to Herbert Siegel's Chris-Craft, a white knight who promptly turned into a tormentor, attacking Ross's pay (then among the highest in America) and clipping his power ^[4].

His masterpiece was the 1989 combination of Warner with Time Inc. Ross insisted the transaction be structured as a stock merger rather than a sale, so that no one could say Time had bought Warner or that he was a caretaker ^[4][2]. When Paramount lunged with a hostile $175-a-share cash bid for Time, Time's board restructured the deal into a $14-billion-plus cash-and-stock acquisition of Warner and beat Paramount in the Delaware courts, a landmark decision that enshrined the right of a board to defend its "culture" and long-term plan ^[7][2]. Ross emerged as chairman of Time Warner with a ten-year contract whose stock-based value was reported at roughly $193 million, and within two years he had outmaneuvered and fired the Time-side heir apparent, Nicholas J. Nicholas Jr., installing his own ally Gerald Levin ^[4][6].

He did not live to see what he had made. Diagnosed with prostate cancer in 1991, Ross died on December 20, 1992, at sixty-five ^[5][1]. He remains the archetype of a distinctly American figure: the conglomerateur as impresario, who understood that in the entertainment business the product being financed and the talent being seduced were finally the same thing, and who could not always tell where charm ended and self-dealing began ^[1][4].

He was born Steven Jay Rechnitz on September 17, 1927, in the Flatbush section of Brooklyn ^[4]. The Depression wiped out his father's money, and around 1932 the family changed its name to Ross, a small act of American reinvention that his biographer Connie Bruck treats as a key to the man, who spent his life refashioning identities, his own most of all ^[1][4]. Tall, athletic, and magnetic, he won an athletic scholarship to the Columbia Grammar School, was elected student-council president, and learned early that he could charm a room ^[4].

After a brief Navy stint at the end of World War II and a two-year degree from Paul Smith's College in the Adirondacks, Ross drifted through the New York garment trade as a stockroom boy and salesman, including a spell selling children's bathing suits for an uncle ^[4]. The pivot of his life was his 1954 marriage to Carol Rosenthal, daughter of Edward Rosenthal, who owned The Riverside, the largest funeral business in the country ^[4][1]. Ross at first balked at joining the family firm, repelled by the undertaking trade, until he was offered an administrative rather than mortuary role ^[4].

It was inside that staid, profitable business that the dealmaker was born. Noticing the funeral fleet sat idle at night, he persuaded his father-in-law to let him rent the cars after hours; the side venture's profits let him found Abbey Rent-a-Car, which he soon married to the Kinney parking empire of Caesar Kimmel ^[4][1]. By 1962 he had taken the combined Kinney public. He was thirty-four, and he had discovered the only thing he ever truly did: turn an overlooked asset into a stock, and a stock into a bigger one ^[4][1].

Ross is the founding figure of the modern entertainment conglomerate, the man who proved that a parking-lot operator with a stock and a salesman's nerve could assemble film, music, television, publishing, and cable under one roof and run it not by command but by cultivating talent. The Time Warner he built was, at his death, the largest media company in the world, and the management style he pioneered, decentralized divisions, outsized incentives, a chairman who was patron and impresario more than operator, became the template, for better and worse, of the industry that followed ^[1][5][6].

The inheritance is genuinely double-edged. The Delaware courts' decision in the Paramount-Time fight, which his deal-making provoked, reshaped American corporate law on takeover defenses and the rights of boards ^[7]. Yet the same conglomerate logic he perfected, grow by merging, bind people with money, trust the deal to justify itself, ran on after him into the disastrous AOL Time Warner combination of 2000, engineered by his protégé Gerald Levin, whom Ross had installed ^[3][6]. Steven Spielberg, who modeled aspects of Oskar Schindler on Ross and dedicated Schindler's List to him, called him the man who taught him most about a certain kind of generosity and seduction ^[1][4].

Connie Bruck's Master of the Game and Richard Clurman's To the End of Time fixed the verdict that history has largely kept: a brilliant, warm, openhanded builder of empires whose flaws were the precise underside of his gifts, and whose career is the best single case study in how the entertainment business actually finances its dreams ^[1][2].